618 had a good start, and the company's market topped the country in the first week: the first wave of the Tmall 618 promotion in 2024 was from 8 p.m. on May 20 to May 28. According to AVC data, in the 21st week of 2024 (2024.5.20-2024.5.26), the online market share of the company's sweeper sales was 33.86%, an increase of 11.39 pcts over the previous year, and the big promotion reached the top of the industry during the week. In February 2024, the company released the P series upgraded P10S Pro (of which the water tank version costs 3999 yuan and the automatic sewerage model is 4,599 yuan), which is 700 yuan higher than the average price of the P10 (the water tank version costs 3,299 yuan, the automatic sewage and sewerage model is 3,899 yuan). Driven by price increases for major new products, the company's average online price rose 15.2% to 4,163 yuan in the first week of 618.

New products continue to be popular, and are expected to continue to be released throughout the year: According to AVC data, in the 21st week of 2024 (2024.5.20-2024.5.26), the company's three new products reached the top 10 best-selling models, tied for first place. Among them, the P10S PRO water tank version accounted for 10.01% of the sales market, ranking 1st, with an average price of 3,838 yuan. The P10S PRO water and sewage version accounted for 9.71% of the sales market, ranking 3rd, with an average price of 4,377 yuan. The G20S water and sewage version had a sales market share of 3.94%, ranking 3.94% 7. The average price is 5,706 yuan. It is the only model with an average price of 5,000 yuan or more among the top 10 best-selling models. The P10S PRO is fully functional, with strong competitiveness in core capabilities and innovative functions; G20S products are well-balanced and have advantages in cleaning modules and user experience. We believe that, based on the word-of-mouth advantages and comprehensive product strength accumulated by the G series and P series, the company is expected to continue to have an advantage in the domestic high-end price band (over 5,000 yuan) and cost-effective price band (around 4000 yuan).

Investment advice: Looking at domestic sales, the company had a good start in the first week of 618. The new P series and G series products continued to be popular, and had an advantage in the mid-range and high-end price bands, showing a sharp rise in volume and price, driven by terminal demand; in terms of export sales, the company is expected to continue its rapid growth trend in North America, Europe, and the Asia-Pacific region. As the new overseas product S8 Max Ultra begins to be launched, it may maintain a relatively rapid growth rate even with a high base in the second quarter of last year. We expect the company to achieve operating income of 112.73/145.59/18.686 billion yuan in 2024-2026 and net profit to mother of 25.86/33.16/4.224 billion yuan, corresponding PE of 21.19/16.53/12.97 times, respectively, and continue to give an “increase in holdings” rating.

Risk warning: risk of shareholders' holdings reduction; risk of RMB exchange rate fluctuations; risk of North American tariffs; increased competition risk.